The House Ways and Means Committee amended and approved a tax reform bill Nov. 9, the same day the Senate announced its version of the legislation. Both bills appear to include similar provisions that would affect international trade.
According to a Ways and Means Committee press release, the House bill would lower the corporate tax rate from 35 percent to 20 percent, allow U.S. multinational corporations to repatriate foreign earnings at one-time low rates, move the U.S. to a territorial tax system to prevent double taxation on U.S. companies’ foreign earnings, and end incentives that reward companies for shifting jobs, profits, and manufacturing headquarters overseas. This bill was revised during committee markup with respect to the treatment of deferred foreign income and excise taxes on payments from domestic corporations to related foreign corporations.
The Senate bill, which the Senate Finance Committee will begin marking up Nov. 13, appears to be largely similar on these issues. A committee fact sheet states that this bill would lower the corporate tax rate to 20 percent, shift the U.S. to a territorial tax system with base erosion protections to eliminate double taxation, make it “simpler and less onerous” for U.S. multinationals to repatriate foreign earnings, and create incentives for companies to locate and operate in the U.S.